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Internet Google Sued for Deceptive Tactics
Jason Mick (Blog) - September 11, 2007 11:07 AM

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30 comment(s) - last by Spivonious.. on Sep 12 at 9:35 AM

Australian courts are seeing a world-first trial pending against Google that alleges that the search giant used deceptive business practices by selling off top search positions

Search giant Google is used to hearing good news, as its phenomenal growth continued, as it competitors such as Yahoo have shrunk.

However, Google received some bad news yesterday when the Australian Consumer and Competition Commission (ACCC) announced that it was taking a world-first legal action in charging Google in a Sydney, Australia Federal Court. The ACCC accuses Google of using deceptive business tactics, where it will sell top search spots on its internet search engine for large fees.

It alleges that Google tries to market itself as a purely "organic" search engine, based on traffic, but instead directs much of its traffic based on prioritization, controlled advertising revenue.

Additionally the ACCC has another major legal accusation against Google. Online car retailer Trading Post breached the Trade Practices Act in 2005 when it paid Google to use the names of competitor NSW car dealerships Kloster Ford and Charlestown Toyota as hyperlinks to its own site. These links appeared in Google's sponsored links section, and the resulting pages bore no affiliation to the Trading Post's competitors.

Kloster Ford filed a complaint when it discovered this partnership.

Trading Post created the links with AdWords, a Google commercial program that sets up hyperlinks.

Google Australia spokesman Rob Shilkin later responded to the claims by stating that the company remained committed to providing relevant information to search engine users. The case is the first case of this nature against Google to reach a Federal Court.

Google has tried in recent years to promote itself as the voice of freedom of information on the web through its Google Earth service, and its recently release Google News service, among other projects, which makes these legal allegations particularly troublesome.

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Tempest in a teapot

By masher2

(blog) on 9/11/2007 11:51:29 AM , Rating: 2

So when I go to the Google search service, and type in "Kloster Ford", I'm presented with both a link to Kloster Ford (provided without any charge to me or the company itself) as well as a clearly-labelled "Sponsored Link" to one of the company's competitors?

How on earth anyone could find this damaging to consumers or fair trade is beyond me.

RE: Tempest in a teapot

By Trisagion on 9/11/2007 12:28:26 PM , Rating: 1

What the article says is that Trading Post used Google Adwords to put up links with the names 'Kloster Ford' and 'Charlestown Toyota' that sent users to their own site.

That is illegal.

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RE: Tempest in a teapot

By masher2

(blog) on 9/11/2007 1:02:35 PM , Rating: 2

> "That is illegal. "

By which law? It's not even a trademark violation. Neither Google nor the keyword purchaser is displaying the mark in conjunction with their own products. Nor does there appear to be any reasonable chance of confusing the consumer. Is there really anyone here who believes someone will accidently buy a car from the Trading Post, thinking they were shopping at Kloster Ford?

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RE: Tempest in a teapot

By JasonMick

(blog) on 9/11/2007 1:15:13 PM , Rating: 3

I believe it is illegal to put up fake website impersonating a corporate entity.

Now I agree with the intelligence check principle, but a certain amount of customers might click the fake link, and depending on what they posted to it, be disuaded from buying a car at the place (for instance if the fake website listed higher prices than their competitors).

I think most users assume that a sponsored link to a page is a link to the party appearing in the website title. For example, if I clicked a sponsored link that said "CNN News", I would probably assume that it is CNN News I am going to. I might notice the url up top and realize wait...cjb.bobpage.net...thats not CNN..but many people wouldn't.

If I paid Google to sponsor a fake Fox News site, and then put up a page with a bunch of fake news stories, Fox would probably try to sue me and Google =P

Similarly I can see why this dealership was angry.

Whatever legal gray area there is, the illegality of the action is reinforced by the fact that they used the company's name in the page title, and had a description that used the company's name and made it sound like the company's page as well.

Another dangerous thing about Google not monitoring their advertising content, is that spammers/virus writers could pay Google using fake identities to post links which posed as a common household name like "ABC News" or "Dailytech" and link to a page which contained adware/trojans/etc. If they wanted to be really sneak, they could even copy the page for the day, to make it look real.

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RE: Tempest in a teapot

By masher2

(blog) on 9/11/2007 2:38:25 PM , Rating: 2

To be clear, my original post was referring to "sponsored links" appearing on a Google search. Nothing deceptive at all there.

In the case of Google adwords, the issue is admittedly a bit less clear cut. When you see hyperlink labelled "Kloster Ford", there is some expectation that the link actually takes you to that site.

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RE: Tempest in a teapot

By TomZ on 9/11/2007 2:54:48 PM , Rating: 2

quote:
I believe it is illegal to put up fake website impersonating a corporate entity.

That's not what's going on here - there's no "fake website," nor any expectation that the ad click-thru will take you to that company's web site.

What has been described is actually very common - I have personally seen it tons of times. And there is no reason for it to be illegal, so long as you don't use somebody else's registered trademark as keywords.

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RE: Tempest in a teapot

By creathir on 9/11/2007 1:33:05 PM , Rating: 2

The Google ad would be akin to a TV spot that said "Make sure when you buy your next car, buy from the Trading Post or Kloster Ford! Our address is... <Gives Trading Post address>"

This is not something that is illegal. No trademarks violated. At best you could make a case that they falsely used the DBA of Kloster Ford, but that is a stretch. They are not defaming the dealership or anything like that. This would also be like building your dealership down the road from the Kloster, Kloster advertising, and Trading Post getting customers who mistakenly go to the wrong place.

Nothing illegal here...
I usually despise Google, but in this case, they are in the right.

- Creathir

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RE: Tempest in a teapot

By Viditor on 9/12/2007 3:54:04 AM , Rating: 2

quote:
By which law?

Australia's Fair Trade Practices Act...remember that this is NOT the US.

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RE: Tempest in a teapot

By Spivonious on 9/12/2007 9:31:53 AM , Rating: 2

At the very least, it's false advertising.

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RE: Tempest in a teapot

By JasonMick

(blog) on 9/11/2007 12:30:34 PM , Rating: 2

From the quoted article:

"These hyperlinks appeared in a shaded area titled "Sponsored Links" at the top of the results page, but appeared to be the dealerships' official sites, or at least affiliated with the dealerships"

It would not be their sponsor hadn't impersonated these other websites, and put up fake links. They weren't just putting up their own link.

I know a lot of click traffic would likely be diverted by these "dirty click" tactics.

Google as a business has a responsibility to ensure within reason that its advertising partners are not abusing other company's copyrights or trademarks in underhanded business campaigns such as this.

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RE: Tempest in a teapot

By theapparition on 9/11/2007 12:31:55 PM , Rating: 2

quote:
How on earth anyone could find this damaging to consumers or fair trade is beyond me.

Your problem is that your rational. There is no logic when dealing with irrational people (or women! :P)

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RE: Tempest in a teapot

By webdawg77 on 9/11/2007 12:32:40 PM , Rating: 2

quote:
There is no logic when dealing with irrational people (or women! :P)

True that!

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RE: Tempest in a teapot

By carl0ski on 9/11/2007 11:05:47 PM , Rating: 2

I hate these lawsuits

If i go to a Department Store and ask for a Sanyo branded TV
The sales man convinces me that Samsung or Panasonic is a better choice.

Is that taking the Sanyo name and directing me to a different brand illegal?

Are all sales men that suggest better alternatives criminals?

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Curious

By SandmanWN on 9/11/2007 1:30:32 PM , Rating: 2

How can you sue a search engine for the way its searches show up? Not only that but how do you sue a voluntary website? No one is forced to use google. There are many other sites out there that offer the same services. Where do these people get off telling google how to display the search results of the companies that pay to advertise there?

It just seems silly to me. Thats my personal opinion anyway.

RE: Curious

By A5un on 9/11/2007 3:34:04 PM , Rating: 2

So if your someone sat in a car that had faulty tires which blew up and killing all passengers in the car, then that's too bad? Shoulda got some other brand of tires, as there are other tire manufactures that offer the same size of tires?

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RE: Curious

By TomZ on 9/11/2007 3:52:56 PM , Rating: 2

Oh, was someone killed by the allegedly deceptive links? I missed that in the article.

This is possibly just a case of false advertising, not product liability or negligence. Not really the same thing.

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RE: Curious

By A5un on 9/11/2007 4:35:31 PM , Rating: 1

Who said someone was killed by the "allegedly deceptive links?" I don't think I ever mentioned that...I could be wrong, but I can't find it...People like to infer a lot of things these days.

In any case, I was commenting on the fact that him, and a lot of other people, like to use the idea of voluntary involvment as a cover. What the corporation does with this cover is not the point, but the fact that some people use this to blantantly excuse a corporation of its responsibility to their consumer is the whole point. Legality aside, wasn't there something called business ethics?

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RE: Curious

By TomZ on 9/11/2007 5:15:52 PM , Rating: 3

Uh, I was just saying I don't get your analogy.

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RE: Curious

By SandmanWN on 9/11/2007 5:11:34 PM , Rating: 2

I don't know what tires blowing up and killing people have to do with anything I asked about... Your point was so off topic I just went glassy eyed. eh

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RE: Curious

By A5un on 9/11/2007 5:28:47 PM , Rating: 2

Hrm, maybe I should rephrase?

Let tire blown ups or alledgedly false advertisement = X
Let voluntary involvement = Y

Your claim that since Y is valid to X is okay to occur is an irresponsible claim.

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RE: Curious

By SandmanWN on 9/11/2007 9:49:26 PM , Rating: 2

Still over my head. I apparently don't speak Analogy.

Google gets paid for certain advertisers to get top spots on a search. They also get paid for keyword advertisements. Obviously the two are going to intersect at some point in time but isn't this understood going into this sort of deal? So now someone is suing because there as doesn't go up the list as far as one of their competitors? I mean really, we are suing for google search engine spots here. Its just silly.

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RE: Curious

By TomZ on 9/11/2007 10:06:16 PM , Rating: 2

Actually, I don't think that's a correct statement of the facts. Google does accept adwords for placement of advertisements relevant to the search, however, AFAIK companies cannot pay to modify the actual search results themselves.

Furthermore, the company in question apparently wrote an adwords advertisement that was perceived as being deceptive. That is entirely possible, given how adwords works. Adwords will check for trademarks, and they will also ask you to change your ad if another business claims a trademark infringement. But other then that, the advertiser is pretty much responsible for the content, not google.

The fact that google is named in this suit is just the legal team trying to cover all bases. Google will probably claim they didn't write the content and be able to walk away. But I suppose that depends a lot on Austrailian law, which I know nothing about.

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RE: Curious

By Spivonious on 9/12/2007 9:35:50 AM , Rating: 2

No, it would be like someone buying tires and being told that they were Goodyear when in fact they were Pirelli.

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strange

By thejez on 9/11/2007 12:20:57 PM , Rating: 4

The internet is a deceptive place...
* browser pages that look like windows pop-ups
* email that masks itself as if it were from a friend
* companies staging "leaked" info to promote products
* companies launching "independent" sites to rate products that promote the brand are selling
* contracted music artists launching grass-roots web site to promote themselves as a starving musician just getting started
* professional actors starting you tube vid-blog pretending to be a teenage girls just thinking out-loud in their bedroom
* men pretending to be girls
* girls pretending to be men
* hot stock tips
* etc...

get used it.

RE: strange

By webdawg77 on 9/11/2007 12:31:31 PM , Rating: 2

You forgot to mention girls pretending to be older than they are and law enforcement pretending to be girls.

The "cyber" world is just an extension of the "real" world. No surprises here.

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RE: strange

By Bioniccrackmonk on 9/11/2007 12:45:20 PM , Rating: 5

The best saying I have ever heard is this:

On the internet, guys are guys, girls are guys, and kids are the feds.

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RE: strange

By rsmech on 9/11/2007 3:30:12 PM , Rating: 2

You are totally missing the point. There are many shady or deceptive things like this in the real world also and yes I am use to it. What you don't understand is that in the real world I know Mc Donalds isn't the local bar or the cinema isn't the local peek show. Because of this I can CHOOSE where to go or what to see. I expect the same from the almighty Google. If they want to be a portal to shady or deceptive links them don't deny it therefore I can also CHOOSE where I go & what I see here also. The internet is no different then the real world, we made it.

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huh?

By Oregonian2 on 9/11/2007 1:41:20 PM , Rating: 2

Is Trading Post being sued too? Seems like they are the culprits. It's their deceptive Adwords ad, Google was just the publisher of it. If DirecTV or DishTV publishes a misleading ad and want to be sued for it, do the newspapers and magazines that published it get sued instead?

I'm not saying Google doesn't have some responsibility, but it would seem that Trading Post is the primary culprit. But then I have no idea about Australian laws about such things.

In the U.S. there seems to be some similarity to ABP suing Google for showing competitor ads when their company's name was searched for (ABP gave up and dropped their case in an "agreement" that didn't have Google change their proceedures).

RE: huh?

By jajig on 9/11/2007 1:55:37 PM , Rating: 3

This has been an ongoing saga for a while now http://www.abc.net.au/7.30/content/2005/s1458715.h...

Both Trading Post and Google are named

The ACCC is alleging that Trading Post contravened sections 52 and 53(d) of the Trade Practices Act 1974 in 2005

The ACCC is also alleging that Google, by causing the Kloster Ford and Charlestown Toyota links to be published on its website, engaged in misleading and deceptive conduct in breach of section 52 of the Act.

http://www.accc.gov.au/content/index.phtml/itemId/...

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1% organic vs 100% organic

By animedude on 9/11/2007 4:07:30 PM , Rating: 2

Did Google advertise themself as "100%" organic search engine? Don't you love how the marketing people goes in circle to get over the law.

"Spreading the rumors, it's very easy because the people who write about Apple want that story, and you can claim its credible because you spoke to someone at Apple." -- Investment guru Jim Cramer